Gold has bumped up against its recent highs. This is an area where over the past it has reversed lower. Will this occur again?
In my analysis, the likelihood is that Gold will break through to new relative highs. There may be a pullback in the short-term, but it will be a relatively small and healthy correction.
Take a look at the longer-term SPDR Gold Trust (GLD) Weekly Chart below. You can see that we have been making higher highs and higher lows in an uptrending channel since late 2008. While 100 has been resistance, 95 is now a support level. We also have support below current levels around the 91.5 area -- the previous two pullbacks to the Middle Band & Exponential Moving Average were followed by bounces higher. Weekly Percent R is very strong and both Percent R pullbacks reversed higher before breaching the key 50 mid-level.
Bottom line in my analysis, this looks like a healthy consolidation in the 95 to 100 area, which will precede an upside breakout in GLD.
GLD Weekly Chart
Moby Waller,
BigTrends.com
1-800-244-8376
Disclosure: No current recommendation or position.
